8 Reatilers hit hard this past fisical year

It is the time of year again, when America’s largest retailers release those critical holiday season figures and disclose their annual sales. A review of these numbers tells us a great deal about how most of the companies will do in the upcoming year. And while successful retailers in 2012 may add stores this year, those that have performed very poorly may have to cut locations during 2013 to improve margins or reverse losses.

For many retailers, the sales situation is so bad that it is not a question of whether they will cut stores, but when and how many. Most recently, Barnes & Noble Inc. (BKS) decided it had too many stores to maintain profits. Its CEO recently said he plans to close as many as a third of the company’s locations.

Several of America’s largest retailers have been battered for years. Most have been undermined by a combination of e-commerce competition, often from Amazon.com Inc. (AMZN) and more successful retailers in the same areas. Borders and Circuit City are two of the best examples of retailers that were destroyed by larger bricks-and-mortar competition and consumers transitioning to online shopping. These large, badly damaged retailers could not possibly keep their stores open.

Currently, the best example of a struggling retailer is J.C. Penney Co. Inc. (JCP). The department store chain’s third-quarter revenue dropped more than 26% year-over-year, and its same-store sales fell by about the same. With J.C. Penney’s e-commerce sales slipping by an ever greater amount, it was left with nowhere to go for bottom line improvement other than deep cost cuts.

Store closings can bring a retailer some relief and may not always portend its demise. Gap (GPS) announced in 2011 it would shutter 21% of its U.S. store base. It has since transformed itself into a much more successful clothing retailer. As the retailer completes the process of downsizing, its store operations likely will become even more efficient and its margins greater.

Very few retailers get into sudden trouble. Chains like Kmart and RadioShack Corp. (RSH) have struggled for years just to stay in place. Their brands have lost much of their luster. Their stores have become old and their locations no longer attractive. The consumer’s perception is that the products they sell can be found elsewhere, usually at a cheaper price, and at retailers with better customers service and wider selections of products.

24/7 Wall St. reviewed the weakest large U.S. retailers and picked those that likely will not be profitable next year if they keep their current location counts. 24/7 analyzed the retailers’ store counts, recent financial data, online presences, prospects against direct competitors and precedents set by other large retailers that have downsized by shuttering locations. We then forecast how many stores each retailer will have to close this year to sharply increase its prospects financially, even if some of those location closings do not occur for several years. These forecasts were based on drops in same-store sales, drops in revenue, a review of direct competitors, Internet sales and the size of cuts at retailers in the same sector, if those were available.

These are the eight retailers that will close the most stores in 2013.

The holiday season was rough for Best Buy Co. Inc. (BBY). Same-store sales declined by 1.4% year-over-year, with international stores posting a 6.4% decline while U.S. same-store sales were flat. Companywide, the electronics retailer reported that holiday revenue had declined to $12.8 billion from $12.9 billion the year before. In the most recent completed quarter, during which same-store sales declined 4.3%, the company reported a loss of $0.04 per share. Best Buy has been plagued by customers “showrooming” — looking at products in the store and then purchasing them online — in recent years. Speculation persists that former chairman and founder Richard Schulze may buy out the company.

Both Sears and Kmart have been going down the tubes for a long-time, steadily losing their middle-income shoppers to retailers such as Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT). Sears Holdings Corp.’s (SHLD) same-store sales have declined for six years. In the most recent year, same-store sales at the namesake franchise fell by 1.6% and at Kmart by 3.7%, compared to the year-ago period. The company is already in the process of downsizing its brick-and-mortar presence. In 2012, Sears announced it was shutting 172 stores. CEO Lou D’Ambrosio is leaving the company in February, to be replaced by chairman and hedge-fund manager Edward Lampert. Lampert has minimal operating experience in retail management.

Click article for rest.

I really feel sorry for thier hourly employees, but the rest of Best Buy f them. Did it to themselves.

Same thing happening in the UK also. Be interesting to see how far things go....

"When I was 12, I milked my eel into a pot of turtle stew. I flogged the one-eyed snake, I skinned my sausage. I made the bald man cry into the turtle stew, which I believe my sister ate. At least I hope she did."

Best Buy doesn't deserve to be open. When they first started they became popular because they were one of the cheapest electronics retailers to be found. However, now they are one of the most expensive, with prices that are FAR more than online retailers like Amazon.

For instance, I can (And a month ago did) go to Primotronix and buy a Canon T4i Digital SLR camera for $589.99 with no tax and free shipping. The same camera at Best Buy costs $974.24 after tax and shipping are added in.

Almost a year ago I bought new speakers for my car. Best Buy was charging more than double what I paid online for them. It was the difference between $400 for the two pairs of speakers, or more like $850 to buy the same speakers at Best Buy.

They deserve to go out of business. They've been ripping people off for years.

I work at retail (the store I work at is called "Tuesday Morning") and I can tell you first hand that our stores is suffering big time. I don't blame online retailers, I blame the whole economic output plus the lack of consumer confidence. Everyday, I am fretting my store will close down, because we are performing badly. Also, finding a job is hard these days, especially people like myself who only has a High School Diploma. I am going back to school, but how am I supposed to pay for it if I don't have a job and I can't get financial aid? It's getting worse out there everyday.

As for the article, I read this today and felt bad. With a short stint at Radioshack, it was quite an experience. You sell super expensive items and the four people who might come in your store that day usually end up buying nothing because of it. Not the best of times.

I went to a local furniture store this past week to buy a new sectional sofa for our living room. While browsing the store my two year old son climbed on a large sectional and nestled in the cushions, prompting my wife and I to give it a sit. We loved it!

Later that night I went online and found the same sofa available at a website called sofasandsectionals.com, so I contacted them and asked about the cost on a specific configuration. They told me the four-piece sectional would cost just under $2500, and that there would be no sales tax or shipping costs.

Armed with that knowledge, I went to the bank the following day and withdrew $3000 cash, hoping that I could return to the local furniture store to negotiate a price comparable to that which was offered online. After the salesman from the previous day escorted us back to the sofa, we took our time picking out fabrics for both the sectional and the accent pillows, as the different fabrics were of different quality and different costs. Once we made our choice, I called sofasandsectionals.com from within the store to double-check on the fabric availability; they were available so it was time to negotiate a price.

When I signaled the salesman back to my location, he gave me the total, rounded off to $3700. This was apparently the 'sale' price, but the total breakdown was approximately : 3100 for the sectional, 150 for state sales tax, 300 for the warranty and 150 for shipping. When he gave me that number, I immediately knocked off the warranty because I have no interest in something I've never used in the past on other furniture purchases. The new number, $3400, was almost one thousand dollars more than the online price, so I asked the sales man if he could bring the price down more. He said he would talk to his manager about reducing the cost of shipping, which they countered with a $20 savings. I countered with free shipping, but they declined, although I live about 15 miles away. At this point, I laid 25 $100 bills on the table, and I said I will get the sectional for less than this amount.

When negotiating these transactions cash on hand is a very powerful thing. Since the retailer doesn't have to pay any service fees to the credit card company those savings can be passed directly to the consumer, if you, the consumer, are mindful of that fact.

The salesman was excited about a cash purchase because it gave him more wiggle room. He hurried back to his manager, who happened to be the store owner, and they discussed the proposition. Unfortunately, the salesman came back and started into some explanation on what the normal price is and how the 'sale price' that he had already given me was 40% less than normal. I was stunned at that price, but I asked that he just give me his managers bottom line.

"The lowest we can go is $2750, and that's barely profitable," he said.
"I would still be responsible for shipping and tax, correct?"
"Yes", he replied.

At this point I came clean. I told him that I was already in contact with an online retailer and that they could provide the sofa for $2500, and there would be no tax or shipping cost. He wanted to speak to his manager one last time, but before, he wanted to verify that my price was correct. I gave him the website and he turned to walk away, but I stopped him. "I will pay you no more than $2650 for this sofa; $2500 to match the sofa cost online and $150 to cover tax. Let your manager know that's as high as I'll go." I figured it was a fair proposition. Many retailers will do price matching if you find the product at a lower cost elsewhere and I was willing to pay the tax in full... I just needed them to budge on the sectional price and to give free shipping.

After about ten minutes, the salesman came back and sat next to my wife and I, who were enjoying the feel of our soon-to-be sofa. He opened his binder and removed a few sheets of paper that had numbers scribbled on them. "You know, as a local retailer, we pride ourselves in our commitment to our customers. One of the benefits of buying through us, as opposed to some web operation possibly run out of some mans garage, is that we're local, and we're capable of resolving issues in a more efficient manner." I asked him, "So, what's your bottom line on the price?" "$3050, and that includes tax and shipping."

My wife and I stood up, shook his hand, thanked him for his time and turned toward the door. He said, "You know, if you were to buy this sofa from us, we'd be willing to help you on any future purchases." That statement rubbed me the wrong way. I said, "I'd love to support a local store, but you guys are selling the same product for hundreds of dollars more. If you want to come down to my level, I'd love to give you the business, otherwise, I'm buying it elsewhere." It was a quiet and uncomfortable walk through the labyrinth of furniture. As we approached the front door I said, "It'll take me 30 minutes to get home. You still have time to reconsider." Before going much further, I also said, "And let's be real. If I don't buy this sofa from here, this business will still be interested in my money since I'm looking to spend much more on real wood furniture."

My wife and I felt pretty good driving down the road. This was our first time trying to negotiate any prices at a retailer of any sort, and we felt successful. Not because we forced them to bend to our demands but because, in the end, we knew we were going to save $1200 on our new sectional. That's money saved that can be spent on a new coffee table, TV stand, or desk. Part of me relished in the fact that there would be a "why didn't you close that sale" conversation between the salesman and the manager during our ride home; the obvious answer isn't faulting the salesman, but the manager, who is most likely be oblivious anyways.

After speaking to a cheerful young man with the online retailer, I had a final price for the order: $2,456.00, on the AMEX, with an expected delivery date in two months.

Online Retailer: 1
Local Furniture Store: 0

I am still amazed RadioShack is still open, that place should of closed YEARS ago! Who really goes there anymore?!

I go there whenever I need to repair electronics but don't want to wait for replacement parts to arrive in the mail. Buying capacitors/resistors in small quantity online can get expensive with shipping costs.

I go there whenever I need to repair electronics but don't want to wait for replacement parts to arrive in the mail. Buying capacitors/resistors in small quantity online can get expensive with shipping costs.

I personally avoid that place like the plague! The times that I did go there the sales people (around me at least) were not knowledgeable about the stuff they sell and the quality of their stuff isn't the best. If I need resistors, capacitors, etc. I go to a local family owned electronic shop that sells high quality parts and everyone there is very friendly/knowledgeable and being right down the road from my work makes it even better!

I went to a local furniture store this past week to buy a new sectional sofa for our living room. While browsing the store my two year old son climbed on a large sectional and nestled in the cushions, prompting my wife and I to give it a sit. We loved it!

Later that night I went online and found the same sofa available at a website called sofasandsectionals.com, so I contacted them and asked about the cost on a specific configuration. They told me the four-piece sectional would cost just under $2500, and that there would be no sales tax or shipping costs.

Armed with that knowledge, I went to the bank the following day and withdrew $3000 cash, hoping that I could return to the local furniture store to negotiate a price comparable to that which was offered online. After the salesman from the previous day escorted us back to the sofa, we took our time picking out fabrics for both the sectional and the accent pillows, as the different fabrics were of different quality and different costs. Once we made our choice, I called sofasandsectionals.com from within the store to double-check on the fabric availability; they were available so it was time to negotiate a price.

When I signaled the salesman back to my location, he gave me the total, rounded off to $3700. This was apparently the 'sale' price, but the total breakdown was approximately : 3100 for the sectional, 150 for state sales tax, 300 for the warranty and 150 for shipping. When he gave me that number, I immediately knocked off the warranty because I have no interest in something I've never used in the past on other furniture purchases. The new number, $3400, was almost one thousand dollars more than the online price, so I asked the sales man if he could bring the price down more. He said he would talk to his manager about reducing the cost of shipping, which they countered with a $20 savings. I countered with free shipping, but they declined, although I live about 15 miles away. At this point, I laid 25 $100 bills on the table, and I said I will get the sectional for less than this amount.

When negotiating these transactions cash on hand is a very powerful thing. Since the retailer doesn't have to pay any service fees to the credit card company those savings can be passed directly to the consumer, if you, the consumer, are mindful of that fact.

The salesman was excited about a cash purchase because it gave him more wiggle room. He hurried back to his manager, who happened to be the store owner, and they discussed the proposition. Unfortunately, the salesman came back and started into some explanation on what the normal price is and how the 'sale price' that he had already given me was 40% less than normal. I was stunned at that price, but I asked that he just give me his managers bottom line.

"The lowest we can go is $2750, and that's barely profitable," he said.
"I would still be responsible for shipping and tax, correct?"
"Yes", he replied.

At this point I came clean. I told him that I was already in contact with an online retailer and that they could provide the sofa for $2500, and there would be no tax or shipping cost. He wanted to speak to his manager one last time, but before, he wanted to verify that my price was correct. I gave him the website and he turned to walk away, but I stopped him. "I will pay you no more than $2650 for this sofa; $2500 to match the sofa cost online and $150 to cover tax. Let your manager know that's as high as I'll go." I figured it was a fair proposition. Many retailers will do price matching if you find the product at a lower cost elsewhere and I was willing to pay the tax in full... I just needed them to budge on the sectional price and to give free shipping.

After about ten minutes, the salesman came back and sat next to my wife and I, who were enjoying the feel of our soon-to-be sofa. He opened his binder and removed a few sheets of paper that had numbers scribbled on them. "You know, as a local retailer, we pride ourselves in our commitment to our customers. One of the benefits of buying through us, as opposed to some web operation possibly run out of some mans garage, is that we're local, and we're capable of resolving issues in a more efficient manner." I asked him, "So, what's your bottom line on the price?" "$3050, and that includes tax and shipping."

My wife and I stood up, shook his hand, thanked him for his time and turned toward the door. He said, "You know, if you were to buy this sofa from us, we'd be willing to help you on any future purchases." That statement rubbed me the wrong way. I said, "I'd love to support a local store, but you guys are selling the same product for hundreds of dollars more. If you want to come down to my level, I'd love to give you the business, otherwise, I'm buying it elsewhere." It was a quiet and uncomfortable walk through the labyrinth of furniture. As we approached the front door I said, "It'll take me 30 minutes to get home. You still have time to reconsider." Before going much further, I also said, "And let's be real. If I don't buy this sofa from here, this business will still be interested in my money since I'm looking to spend much more on real wood furniture."

My wife and I felt pretty good driving down the road. This was our first time trying to negotiate any prices at a retailer of any sort, and we felt successful. Not because we forced them to bend to our demands but because, in the end, we knew we were going to save $1200 on our new sectional. That's money saved that can be spent on a new coffee table, TV stand, or desk. Part of me relished in the fact that there would be a "why didn't you close that sale" conversation between the salesman and the manager during our ride home; the obvious answer isn't faulting the salesman, but the manager, who is most likely be oblivious anyways.

After speaking to a cheerful young man with the online retailer, I had a final price for the order: $2,456.00, on the AMEX, with an expected delivery date in two months.

Online Retailer: 1
Local Furniture Store: 0

I go there whenever I need to repair electronics but don't want to wait for replacement parts to arrive in the mail. Buying capacitors/resistors in small quantity online can get expensive with shipping costs.

TBH, $3050 isn't bad. Based of the initial $3100 number I calculated the tax as 4.8 percent.

At 2750 the tax is 132, shipping is 150 which comes out to $3032.

To be honest expecting any lower than $2950 is unreasonable. B&M stores have various expenses that online retailers do not. If they just sold all their products at the base selling price + tax they would probably go out business rather quickly.

It was your decision to buy online rather than from a physical store, but I pose this question to you.

Would you have bought the furniture at all (from either/any retailer) if you did't get to try it out first?

This is the key thing that people forget. B&M stores allow you to try out the product/get hands on experience.

Sure you could just buy everything online due to online reviews without trying out the product yourself. And even if the particular online retailer has a good return policy and free shipping, sending things back can still be a hassle.

And I'm not even addressing things you should probably never buy online (shoes for example among other kinds of apparel).

I hope you are happy with your online purchase, but that B&M retailer basically did the best he could.

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